Company Valuation using Discounted Cash Flows

Today I want to show a simple example of how we can value a company using Discounted Cash Flow (DCF) analysis. The idea is to compute the company’s Intrinsic Value based on the discounted future cash-flows. To compute future cash-flows I will use the historical Free Cash Flow growth rate. To compute present value of these cash flows I will use a conservative 9% discount rate. If you want to read more about the Discounted Cash Flow (DCF) analysis, I recommend following references:

AAPL has experienced the amazing Growth Rate over the last 5 years and the big question is whether AAPL will be able to maintain this Growth Rate in the future. If yes, then the stock price can easily reach new highs as suggested by the Discounted Cash Flow (DCF) analysis.